2014 Inflation Adjustments for Individuals Regarding International Tax Matters

Inflation Adjustmnts

The IRS recently published Revenue Procedure 2013-35, setting forth inflation adjusted items for tax year 2014. With regard to international tax matters, some of the important inflation adjustments include:

$157,000; Covered Expatriate Tax Liability Threshold. This is the section 877(a)(2)(A) average annual net income tax that must be met for the five taxable years ending before the date of the loss of United States citizenship, cessation of long-term permanent residency, or surrendering of green card in order for an individual to be considered a “covered expatriate” under Code § 877A(g)(1). This amount is up from $155,000 in 2013.

$680,000; The Amount of Built-In Gain Excluded from the Expatriation “Exit Tax.” This is the section 877A(a)(3) amount that can be excluded from the mark-to-market gain upon expatriation of a covered expatriate. This amount is up from $668,000 in 2013.

$99,200; Foreign-Earned Income Exclusion. This is the section 911(b)(2)(D)(i) amount of foreign-earned income that is excluded from an individual taxpayer’s gross income. This amount is up from $97,600 in 2013.

$14,000; Annual Exclusion for Gifts. This is the section 2503 amount of gifts that is excluded from gift tax on a “per recipient” basis.

$145,000; Annual Exclusion for Gifts to Non-Citizen Spouses. This is the section 2523(i) amount of the annual gift tax exclusion for gifts to non-citizen spouses. This amount is up from $143,000 in 2013.

$15,358; Threshold for Reporting Gifts from Foreign Persons. This is the section 6039(F) amount that requires an individual to give notice of gifts received from foreign persons. This amount is up from $15,102 in 2013.

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